FLUOR CORP

Previous wording

Through our bank's execution, we completed the sale of all 71 million shares of NuScale in February 2026, generating total proceeds of $1.35 billion. As of March 31, 2026, we had an ongoing program to sell the final 40 million of our NuScale shares but those shares remained on our balance sheet during the execution window. We completed the program in April 2026 and collected total proceeds of $473 million. Since September 2025, sales of our NuScale shares have generated $2.43 billion in cash.

Current wording

We completed the sale of 71 million shares of NuScale in February 2026 for proceeds of $1.35 billion and the sale of the final 40 million shares of NuScale in April 2026 for proceeds of $473 million. Since September 2025, sales of our NuScale shares have generated $2.43 billion in cash, or $2.1 billion after tax.

Previous wording

Such at-cost revenue is generally reflected in our project estimates at equivalent amounts within the revenue and cost elements. Therefore, we believe our adjusted net revenue represents the basis for which we earn fees for our professional services. Others in our industry may have similar terms that they use to similarly measure the earnings power of their services. Even though our involvement with at-cost revenue elements as a principal gives rise to their inclusion in our consolidated revenue, the absence of meaningful markup to them elevates the importance of this non-GAAP analysis. During 2026 and 2025 Quarters, at-cost revenue was approximately $2.1 billion and $1.9 billion, respectively (or approximately 58% and 48% of consolidated revenue). Excluding the amounts of at-cost revenue from both GAAP revenue and from project cost yields an amount that we call adjusted net margin.

Current wording

Such at-cost revenue is generally reflected in our project estimates at equivalent amounts within the revenue and cost elements. Therefore, we believe our adjusted net revenue represents the basis for which we earn fees for our professional services. Others in our industry may have similar terms that they use to similarly measure the earnings power of their services. Even though our involvement with at-cost revenue elements as a principal gives rise to their inclusion in our consolidated revenue, the absence of meaningful markup to them elevates the importance of this non-GAAP analysis. During the 2026 and 2025 Quarters, at-cost revenue was approximately $2.6 billion and $2.0 billion, respectively (or approximately 60% and 51% of consolidated revenue). During 2026 and 2025 Periods, at-cost revenue was approximately $4.7 billion and $3.9 billion, respectively (or approximately 59% and 49% of consolidated revenue). Excluding the amounts of at-cost revenue from both GAAP revenue and from project cost yields an amount that we call adjusted net margin.

Previous wording

(3)Backlog at March 31, 2026 was level with backlog at December 31, 2025. Backlog may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. During the 2026 Quarter, project adjustments totaling $1.1 billion included a scope increase on a DOE project and an increase in CFM on a metals project.

Current wording

(4)Backlog at June 30, 2026 increased compared to backlog at December 31, 2025 due to several large awards booked during the 2026 Period including a multi-year, EPC contract for a uranium enrichment facility and incremental awards in life sciences and mining. Backlog may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur.

Previous wording

(4)Includes backlog of $169 million and $255 million for legacy projects in a loss position as of March 31, 2026 and December 31, 2025, respectively.

Current wording

(5)Includes backlog of $119 million and $255 million for legacy projects in a loss position as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

Revenue decreased in 2026 primarily due to a decline in execution activity for several recently completed projects and projects nearing completion as well as reduced volume on certain Mission Solutions projects partially offset by a ramp up of execution activities on several large projects in our Urban Solutions segment.

Current wording

Revenue increased in the 2026 Quarter primarily due to a ramp up of execution activities on several large projects in our Urban Solutions segment partially offset by a decline in execution activity for recently completed projects and projects nearing completion. Revenue in the 2026 Period was consistent with revenue in the 2025 Period.

Previous wording

Earnings before taxes decreased in 2026 due to the impact of an unfavorable court ruling on a DOD project and cost growth on a large mining joint venture project, partially offset by the gain on the sale of CFHI.

Current wording

Earnings before taxes increased during the 2026 Quarter and 2026 Period due to a ramp up of execution activities and the recognition of favorable close out items on certain projects partially offset by cost growth on a legacy infrastructure project. Earnings before taxes in the 2026 Period also included the impact of an unfavorable court ruling on a DOD project and cost growth on a large mining project as well as the gain on the sale of CFHI.

Previous wording

Net earnings (loss) excluding amounts attributable to equity method earnings (loss) were as follows:

Current wording

Net earnings excluding amounts attributable to equity method earnings were as follows:

Previous wording

The effective tax rate on earnings, including equity method earnings, was (4)% for the 2026 Quarter compared to 19% for the 2025 Quarter. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Current wording

The effective tax rate on earnings, including equity method earnings, was 17% and 6% for the 2026 Quarter and the 2026 Period, respectively, compared to 24% for both the 2025 Quarter and the 2025 Period. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Previous wording

Revenue increased in 2026 due to the ramp up of execution activities on life sciences and mining and metal projects. The increase in 2026 revenue was partially offset by a decline in execution activity for a recently completed project. During the 2026 and 2025 Quarters, at-cost revenue for Urban Solutions was approximately $1.5 billion and $1.2 billion, respectively (or approximately 63% and 57% of their segment revenue).

Current wording

Revenue increased during the 2026 Quarter and 2026 Period due to the ramp up of execution activities on life sciences and mining and metal projects. The increase in revenue during the 2026 Period was partially offset by a decline in execution activity for a recently completed project. During the 2026 and 2025 Quarters, at-cost revenue for Urban Solutions was approximately $1.9 billion and $1.2 billion, respectively (or approximately 66% and 57% of their segment revenue). During the 2026 and 2025 Periods, at-cost revenue for Urban Solutions was approximately $3.4 billion and $2.4 billion, respectively (or approximately 65% and 57% of their segment revenue).

Previous wording

Segment profit and profit margin declined in 2026 due to cost growth of $37 million on a large mining joint venture project and a decline in execution activity for a recently completed project.

Current wording

Segment profit and profit margin increased during the 2026 Quarter due to the ramp up of execution activities on mining and metals projects. The increase in segment profit was partially offset by $44 million attributable to the effects of foreign currency fluctuation, a subcontractor bankruptcy and client-driven changes on an infrastructure project. This project has reached substantial completion. Comparatively, segment profit in the 2025 Quarter included forecast adjustments totaling $54 million for cost growth on 3 infrastructure projects related to subcontractor design errors, price escalation and schedule impacts partially offset by a refinement of our expected recovery from claims against our subcontractors on these same projects. Segment profit and profit margin decreased in the 2026 Period due to cost growth of $37 million on a large mining joint venture project in the first quarter of 2026 and a decline in execution activity for a recently completed project.

Previous wording

New awards decreased in 2026 compared to 2025 due to a large life sciences award booked in 2025. New awards in 2026 included a full notice to proceed on a large aluminum project in the Middle East, incremental work for a pharmaceutical facility, infrastructure expansion on a mine in Chile and a limited notice to proceed on a large-scale data center project in the U.S. Backlog as of March 31, 2026 increased compared to backlog at December 31, 2025 due to the new award activity. Our staffing business does not report new awards or backlog.

Current wording

New awards increased during the 2026 Quarter compared to the 2025 Quarter. New awards in the 2026 Quarter included an EPCM award for a fertilizer project in Canada and an incremental life sciences award in the U.S. Backlog as of June 30, 2026 increased compared to backlog at December 31, 2025 due to the new award activity in the 2026 Period. Our staffing business does not report new awards or backlog.

Previous wording

Revenue decreased in 2026 primarily due to a decline in execution activity for several projects nearing completion. These declines in revenue were partially offset by increased activity on a North American refinery project. During both the 2026 and 2025 Quarters, at-cost revenue for Energy Solutions was approximately $314 million and $472 million, respectively (or approximately 45% and 39% of their segment revenue).

Current wording

Revenue decreased during the 2026 Quarter and 2026 Period primarily due to a decline in execution activity for several projects nearing completion. During the 2026 and 2025 Quarters, at-cost revenue for Energy Solutions was approximately $322 million and $522 million, respectively (or approximately 45% and 46% of their segment revenue). During the 2026 and 2025 Periods, at-cost revenue for Energy Solutions was approximately $636 million and $994 million, respectively (or approximately 45% and 42% of their segment revenue).

Previous wording

New awards in the 2026 Quarter were consistent with new awards in the 2025 Quarter. Backlog declined in 2026 due to the execution pace exceeding new award activity.

Current wording

New awards in the 2026 Quarter increased compared to the 2025 Quarter. New awards in the 2026 Quarter included a limited notice to proceed on the Phase 2 expansion of the LNG Canada export facility. Backlog declined in the 2026 Period due to the execution pace exceeding new award activity.

Previous wording

Segment profit and profit margin declined in 2026 primarily due to the recognition of a $96 million charge resulting from the outcome of a court ruling on a lawsuit filed against us in 2013. Segment profit in 2025 reflected an additional reserve of $28 million resulting from an adverse ruling on a long-standing claim on a project completed in 2019.

Current wording

Segment profit and profit margin increased during the 2026 Quarter primarily due to improved award fee performance within our DOE portfolio. Segment profit and profit margin declined during the 2026 Period primarily due to the recognition of a $98 million charge during the first quarter of 2026, resulting from the outcome of a court ruling on a lawsuit filed against us in 2013. Segment profit during the 2025 Period reflected an additional reserve of $28 million resulting from an adverse ruling on a long-standing claim on a project completed in 2019.

Previous wording

New awards increased in 2026 compared to 2025. Backlog included $1.1 billion and $1.0 billion of unfunded government contracts as of March 31, 2026, and December 31, 2025, respectively. Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods.

Current wording

reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods.

Previous wording

The increase in compensation expense in the 2026 Quarter was primarily driven by higher stock price-driven compensation.

Current wording

The increase in compensation expense in the 2026 Period was primarily driven by higher stock price-driven compensation and performance-based compensation. We executed severance programs in several non-U.S. locations during 2025.

Previous wording

Ourliquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facility and, when necessary, access to capital markets. In 2026, liquidity was positively impacted by proceeds from the sales of NuScale shares and CFHI. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.

Current wording

Ourliquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facility and, when necessary, access to capital markets. In 2026, liquidity was positively impacted by proceeds from the sales of NuScale shares and certain joint venture interests. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.

Previous wording

As of March 31, 2026, letters of credit totaling $413 million were outstanding under our $2.2 billion credit facility, which matures in February 2028. This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, based upon total shareholders' equity excluding AOCI, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.1 billion, all as defined in the amended credit facility, which may be reduced to $1.0 billion upon the repayment of debt. Borrowings under the facility, which may be denominated in USD, EUR or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of March 31, 2026 and through the issuance of this 10-Q, we had not made any borrowings under our credit facility. We have a sub-limit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $903 million.

Current wording

As of June 30, 2026, letters of credit totaling $335 million were outstanding under our $2.2 billion credit facility, which matures in February 2028. This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, based upon total shareholders' equity excluding AOCI, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.1 billion, all as defined in the amended credit facility, which may be reduced to $1.0 billion upon the repayment of debt. Borrowings under the facility, which may be denominated in USD, EUR or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of June 30, 2026 and through the issuance of this 10-Q, we had not made any borrowings under our credit facility. We have a sub-limit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $903 million.

Previous wording

Cash and cash equivalents combined with marketable securities were $3.2 billion and $2.2 billion as of March 31, 2026 and December 31, 2025, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $939 million as of March 31, 2026 and $820 million as of December 31, 2025. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are invested in offshore, overnight accounts or short-term time deposits, to which there is unrestricted access.

Current wording

Cash and cash equivalents combined with marketable securities were $3.0 billion and $2.2 billion as of June 30, 2026 and December 31, 2025, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $806 million as of June 30, 2026 and $820 million as of December 31, 2025. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are invested in offshore, overnight accounts or short-term time deposits, to which there is unrestricted access.

Previous wording

Cash and cash equivalents held by our consolidated variable interest entities (which totaled $336 million and $328 million as of March 31, 2026 and December 31, 2025, respectively) were not necessarily readily available for general purposes. We do not include our share of cash held by our proportionately consolidated joint ventures and partnerships in our consolidated cash balances even though these amounts may be significant. We also consider the extent to which client advances (which totaled $10 million and $14 million as of March 31, 2026 and December 31, 2025, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of March 31, 2026 and December 31, 2025, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

Current wording

Cash and cash equivalents held by our consolidated variable interest entities (which totaled $320 million and $328 million as of June 30, 2026 and December 31, 2025, respectively) were not necessarily readily available for general purposes. We do not include our share of cash held by our proportionately consolidated joint ventures and partnerships in our consolidated cash balances even though these amounts may be significant. We also consider the extent to which client advances (which totaled $16 million and $14 million as of June 30, 2026 and December 31, 2025, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of June 30, 2026 and December 31, 2025, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

Previous wording

During 2026, we spent $516 million to repurchase and cancel 11 million shares of common stock under our repurchase program. In February 2026, our board authorized a 30 million share expansion to the repurchase program. Over 28 million shares could still be purchased under the program as of March 31, 2026. We are targeting approximately $1.4 billion in share repurchases in 2026.

Current wording

During 2026, we spent $816 million to repurchase and cancel 17 million shares of common stock under our repurchase program. In February 2026, our board authorized a 30 million share expansion to the repurchase program. Over 22 million shares could still be purchased under the program as of June 30, 2026. We are targeting approximately $1.4 billion in share repurchases in 2026.

Previous wording

Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project as well as the payment terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our lump-sum projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances. As of March 31, 2026, our backlog included $169 million for ongoing legacy projects in a loss position, including approximately $181 million of estimated unfunded losses associated therewith. The comparable amounts at December 31, 2025 were $255 million of backlog and $212 million of unfunded losses.

Current wording

Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project as well as the payment terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our lump-sum projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances. As of June 30, 2026, our backlog included $119 million for ongoing legacy projects in a loss position, including approximately $68 million of estimated unfunded losses associated therewith. The comparable amounts at December 31, 2025 were $255 million of backlog and $212 million of unfunded losses. We expect funding on legacy loss projects to be substantially complete by the end of 2026.

Previous wording

Proceeds from sales of assets during the 2026 Quarter included $124 million from the sale of our ownership interest in CFHI compared to $61 million from the sale of Stork's U.K. operations during the 2025 Quarter.

Current wording

Proceeds from sales of assets during the 2026 Period included $124 million from the sale of our ownership interest in CFHI compared to $61 million from the sale of Stork's U.K. operations during the 2025 Period.

Previous wording

Investments in partnerships and joint ventures in the 2026 Quarter included $32 million in funding on a proportionately consolidated loss project for an infrastructure joint venture compared to $55 million during the 2025 Quarter.

Current wording

Investments in partnerships and joint ventures included funding to an infrastructure loss project of $64 million and $85 million during the 2026 Period and 2025 Period, respectively. During the 2025 Period, we also paid $33 million to a different infrastructure joint venture for a legal settlement.

Previous wording

We have an ongoing stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. During the 2026 Quarter, we repurchased 11 million shares of common stock under the repurchase program for total consideration of $516 million. Since we restarted the program in the fourth quarter of 2024, a total of 32 million shares have been purchased for $1.4 billion.

Current wording

We have an ongoing stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. During the 2026 Period, we repurchased 17 million shares of common stock under the repurchase program for total consideration of $816 million. Since we restarted the program in the fourth quarter of 2024, a total of 38 million shares have been purchased for $1.7 billion through June 2026.

Previous wording

Capital contributions by NCI represent cash inflows from partners of consolidated partnership or joint ventures created primarily for the execution of single contracts or projects. Capital contributions by NCI during the 2026 Quarter related to an infrastructure joint venture.

Current wording

Capital contributions by NCI represent cash inflows from partners of consolidated partnership or joint ventures created primarily for the execution of single contracts or projects. Capital contributions by NCI during the 2026 Period related to an infrastructure joint venture.

Previous wording

During the 2025 Quarter, we redeemed $18 million of the aggregate outstanding 2028 Notes. The impact on earnings was immaterial.

Current wording

During the 2025 Quarter, we redeemed $36 million of the aggregate outstanding 2028 Notes. The impact on earnings was immaterial.

Previous wording

As of March 31, 2026, letters of credit totaling $413 million were outstanding under committed lines of credit. As of March 31, 2026, letters of credit totaling $851 million were outstanding under uncommitted lines of credit including letters of credit totaling $343 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Current wording

As of June 30, 2026, letters of credit totaling $335 million were outstanding under committed lines of credit. As of June 30, 2026, letters of credit totaling $762 million were outstanding under uncommitted lines of credit including letters of credit totaling $97 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Previous wording

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $13 billion as of March 31, 2026.

Current wording

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $12 billion as of June 30, 2026.